Joint production-planning and distribution optimization of perishable products under a combined shipment structure: A new hybrid policy-based approach

Abstract

Following the pioneering challenge for joint optimization of decisions in supply chains, this paper newly provides an integrated framework to efficiently fulfill a productionplanning and distribution problem in effect. In such an integrated scheme, a set of perishable family products is manufactured on a single batch-processing machine. These products are dispatched to the customers by a third-party logistics service provider with only two types of licensed eco-friendly transportation facilities. In order to efficiently deliver the manufactured products before they become unusable, we propose a combined shipment structure. To accomplish this, the problem is formulated in the context of a mixedinteger linear programming model. In particular, we aim to establish two manufacturing policies based on both increasing and decreasing rates of production and also two delivery policies expressing distinct preferences in fulfilling the customers' demands. The cost structures obtained from the established integrated planning and the resulting distribution configurations are investigated as well. Further, four heuristic algorithms are developed for solving the problem for each hybrid production/distribution scheme derived from the former policies. A numerical study is conducted to compare the mentioned procedures, illustrating the preferable efficiency of the plan obtained through the hybridization of the increasing-production-rate and decreasing-delivery-distance policies.